The price of Solana (SOL) jumped 7% on Monday to trade at $161 after it was confirmed that the first-ever crypto exchange-traded fund (ETF) with staking capabilities is set to be backed by the cryptocurrency and could be trading in the United States as early as Wednesday, July 2.
The REX-Osprey Solana + Staking ETF, issued by ETF provider REX Shares in partnership with digital asset management firm Osprey Funds, is set to become the “first-ever staked crypto ETF”, according to an X post by REX Shares. The fund aims to generate yield for investors by staking at least half of its SOL holdings directly on the Solana blockchain.
Staking is a process similar to earning interest on a savings account, where cryptocurrency holders lock their coins to support the functioning of the native blockchain in exchange for yield or financial rewards. This system is employed by decentralized networks that use the Proof-of-Stake (PoS) consensus mechanism, such as Ethereum, Solana, and Cardano, to help validate transactions and create new blocks.
REX Shares-Osprey Solana ETF Could Be First Regulated Crypto Product to Generate Yield via Staking
The ETF is designed to provide investors with indirect exposure to Solana in the spot market along with staking income, potentially paving the way for broader institutional adoption of the sixth-largest crypto. REX Shares will hold the SOL through a Cayman Islands-registered subsidiary.
The update regarding its launch came in response to a request submitted by REX Shares and Osprey to the US Securities and Exchange Commission (SEC), seeking confirmation that all staff comments on their proposed ETFs had been resolved.
The regulator responded to the company’s letter on Friday, stating that it has no additional comments on the fund. Rex and Osprey are also launching an Ethereum ETF alongside their Solana product that will also provide staking rewards. Earlier in June, Bloomberg senior ETF analyst Eric Balchunas hinted that several altcoin-backed funds could be approved in the summer, with Solana leading the way.
REX-Osprey Solana ETF is Structurally Different from Standard US Crypto ETFs
REX Shares said that its REX-Osprey Solana + Staking ETF launches “a new era of yield-generating crypto exposure.”
It is worth noting that, unlike the standard Bitcoin and Ether spot funds currently available in the US, the REX-Osprey Solana ETF is not structured as a spot ETF in the traditional regulatory sense. Instead, it is registered under the Investment Company Act and taxed as a C-corporation, bypassing the typical SEC approval process.
This regulatory path, often used by energy infrastructure companies, enables a much faster and smoother launch experience, but differs significantly from the standard ETFs in terms of tax efficiency. The REX-Osprey SOL + Staking ETF will tax dividend income at both the corporate and investor levels.
The SEC previously argued that this arrangement conflicted with its ETF rule, which defines acceptable corporate form for the investment products, warning that the proposed REX-Osprey Solana ETF may not qualify as one.
SEC Issues Formal Guidance on Crypto Staking, Paving the Way for Staking-Focused Crypto ETFs
In May, the securities watchdog’s Division of Corporation Finance said in a staff statement that crypto staked in a proof-of-stake blockchain doesn’t require registration under the US Securities Act or fall within its exemptions from registration. The agency also ruled that custodial staking cannot be classified as a securities offering as custodians don’t have a direct role in determining how much is staked and only act as “agents” in the process.
This came after industry players urged the agency to issue formal guidance on staking during the Solana Accelerate conference in New York, citing regulatory uncertainty for Web3 infrastructure providers.
Despite the favorable ruling, the SEC still decided to punt its decision on crypto-staked ETFs and other altcoin-backed funds. The issue has been one of major concern for regulators under the Biden administration, who expressed concerns over financial and security-related risks posed by staking.
However, the Commission under the Trump administration has been positive about Solana ETFs, signalling potential approval in the second half of the year. Recently, it requested crypto ETF issuers to revise language surrounding in-kind redemptions and staking practices, suggesting openness to incorporating those features into traditional ETF structures.
The seven asset managers seeking to launch SOL-backed funds, including Grayscale, VanEck, 21Shares, Canary Capital, Bitwise, and Franklin Templeton, have since updated their filings to include staking capabilities in response to the regulator’s feedback.
The REX-Osprey Solana + Staking ETF will be available to US investors and promises to offer 24/5 liquidity outside of regular market hours, commission-free access via certain platforms, and transparent reward distribution. Unlike staking programs on crypto exchanges, investors retain full exposure through a regulated financial product.
The approval marks a major milestone for the US financial market as crypto-backed securities that allow investors to generate yield through on-chain staking can now coexist with regulated ETF frameworks, a notion once considered a gray area by the SEC.
At the time of writing, Solana (SOL) is trading at $151.31 – up 0.09% in the last 24 hours.
